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In a set-back for Google’s plan to acquire health wearable company Fitbit, the European Commission has announced it’s opening an investigation to dig into a range of competition concerns being attached to the proposal from multiple quarters.

This means the deal is on ice for a period of time that could last until early December.

The Commission said it has 90 working days to take a decision on the acquisition — so until December 9, 2020.

Commenting on opening an “in-depth investigation” in a statement, Commission EVP Margrethe Vestager — who heads up both competition policy and digital strategy for the bloc — said: “The use of wearable devices by European consumers is expected to grow significantly in the coming years. This will go hand in hand with an exponential growth of data generated through these devices. This data provides key insights about the life and the health situation of the users of these devices.Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”

Google has responded to the EU brake on its ambitions with a blog post in which its devices & services chief seeks to defend the deal, arguing it will spur innovation and lead to increased competition.

“This deal is about devices, not data,” Google VP Rick Osterloh further claims.

The tech giant announced its desire to slip into Fitbit’s data-sets back in November, when it announced a plan to shell out $2.1BN in an all-cash deal to pick up the wearable maker.

Fast forward a few months and CEO Sundar Pichai is being taken to task by lawmakers on home turf for stuff like ‘helping destroy anonymity on the Internet‘. Last year’s already rowdy antitrust drum beat around big tech has become a full on rock festival so the mood music around tech acquisitions might finally be shifting.

Since news of Google’s plan to grab Fitbit dropped concerns about the deal have been raised all over Europe — with consumer groups, privacy regulators and competition and tech policy wonks all sounding the alarm at the prospect of letting the adtech giant gobble a device maker and help itself to a bunch of sensitive consumer health data in the process.

Digital privacy rights group, Privacy International — one of the not-for-profits that’s been urging regulators not to rubberstamp the deal — argues the acquisition would not only squeeze competition in the nascent digital health market, and also for wearables, but also reduce “what little pressure there currently is on Google to compete in relation to privacy options available to consumers (both existing and future Fitbit users), leading to even less competition on privacy standards and thereby enabling the further degradation of consumers’ privacy protections”, as it puts it.

So much noise is being made that Google has already played the ‘we promise not to…’ card that’s a favorite of data-mining tech giants. (Typically followed, a few years later, with a ‘we got ya sucker’ joker — as they go ahead and do the thing they totally said they wouldn’t.)

To wit: From the get-go Fitbit has claimed users’ “health and wellness data will not be used for Google ads”. Just like WhatsApp said nothing would change when Facebook bought them. (Er.)

Last month Reuters revisited the concession, in an “exclusive” report that cited “people familiar with the matter” who apparently told it the deal could be waved through if Google pledged not to use Fitbit data for ads.

It’s not clear where the leak underpinning its news report came from but Reuters also ran with a quote from a Google spokeswoman — who further claimed: “Throughout this process we have been clear about our commitment not to use Fitbit health and wellness data for Google ads and our responsibility to provide people with choice and control with their data.”

In the event, Google’s headline-grabbing promises to behave itself with Fitbit data have not prevented EU regulators from wading in for a closer look at competition concerns — which is exactly as it should be.

In truth, given the level of concern now being raised about tech giants’ market power and adtech giant Google specifically grabbing a treasure trove of consumer health data, a comprehensive probe is the very least regulators should be doing.

If digital policy history has shown anything over the past decade+ (and where data is concerned) it’s that the devil is always in the fine print detail. Moreover the fast pace of digital markets can mean a competitive threat may only be a micro pivot away from materializing. Theories of harm clearly need updating to take account of data-mining technosocial platform giants. And the Commission knows that — which is why it’s consulting on giving itself more powers to tackling tipping in digital markets. But it also needs to flex and exercise the powers it currently has. Such as opening a proper investigation — rather than gaily waving tech giant deals through.

Antitrust may now be flavor of the month where tech giants are concerned — with US lawmakers all but declaring war on digital ‘robber barons’ at last month’s big subcommittee showdown in Congress. But it’s also worth noting that EU competition regulators — for all their heavily publicized talk of properly regulating the digital sphere — have yet to block a single digital tech merger.

It remains to be seen whether that record will change come December.

“The Commission is concerned that the proposed transaction would further entrench Google’s market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalisation of the ads it serves and displays,” it writes in a press release today.

Following a preliminary assessment process of the deal, EU regulators said they have concerns about [emphasis theirs]:

• “the impact of the transaction on the supply of online search and display advertising services (the sale of advertising space on, respectively, the result page of an internet search engine or other internet pages)”
• and on “the supply of ‘ad tech’ services (analytics and digital tools used to facilitate the programmatic sale and purchase of digital advertising)”

“By acquiring Fitbit, Google would acquire (i) the database maintained by Fitbit about its users’ health and fitness; and (ii) the technology to develop a database similar to Fitbit’s one,” the Commission further notes.

“The data collected via wrist-worn wearable devices appears, at this stage of the Commission’s review of the transaction, to be an important advantage in the online advertising markets. By increasing the data advantage of Google in the personalisation of the ads it serves via its search engine and displays on other internet pages, it would be more difficult for rivals to match Google’s online advertising services. Thus, the transaction would raise barriers to entry and expansion for Google’s competitors for these services, to the ultimate detriment of advertisers and publishers that would face higher prices and have less choice.”

The Commission views Google as dominant in the supply of online search advertising services in almost all EEA (European Economic Area) countries; as well as holding “a strong market position” in the supply of online advertising display services in a large number of EEA countries (especially off-social network display ads), and “a strong market position” in the supply of adtech services in the EEA.

All of which will inform its considerations as it looks at whether Google will gain an unfair competitive advantage by assimilating Fitbit data. (Vestager has also issued a number of antitrust enforcements against the tech giant in recent years, against Android, AdSense and Google Shopping.)

The regulator has also said it will further look at:

• the “effects of the combination of Fitbit’s and Google’s databases and capabilities in the digital healthcare sector, which is still at a nascent stage in Europe”
• “whether Google would have the ability and incentive to degrade the interoperability of rivals’ wearables with Google’s Android operating system for smartphones once it owns Fitbit”

The tech giant has already offered EU regulators one specific concession in the hopes of getting the Fitbit buy green lit — with the Commission noting that it submitted commitments aimed at addressing concerns last month.

Google suggested creating a data silo to hold data collected via Fitbit’s wearable devices — and where it said it would be kept separate from any other dataset within Google (including claiming it would be restricted for ad purposes). However the Commission expresses scepticism about Google’s offer, writing that it “considers that the data silo commitment proposed by Google is insufficient to clearly dismiss the serious doubts identified at this stage as to the effects of the transaction”.

“Among others, this is because the data silo remedy did not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes,” it added.

Google makes reference to this data silo in its blog post, claiming: “This deal is about devices, not data. We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads. We recently offered to make a legally binding commitment to the European Commission regarding our use of Fitbit data. As we do with all our products, we will give Fitbit users the choice to review, move or delete their data. And we’ll continue to support wide connectivity and interoperability across our and other companies’ products.”

“We appreciate the opportunity to work with the European Commission on an approach that addresses consumers’ expectations of their wearable devices. We’re confident that by working closely with Fitbit’s team of experts, and bringing together our experience in AI, software and hardware, we can build compelling devices for people around the world,” it adds.

Apple sold a lot of Macs last quarter — a record, in fact, for Q3, jumping a full 21%, year over year. Given the state of the world, with most office workers moving to a remote setup, there’s little surprise the company’s desktop and laptops moved at such an impressive clip. For that reason alone, there’s probably no better time to offer a substantial refresh to the company’s perennial favorite all-in-one.

This morning, Apple took the wraps off the latest version of its 27-inch iMac. The changes are, notably, almost exclusively under the hood, but there are a number of key updates as it eyes its long-time bread and butter creative pro clients that it previously courted with the iMac Pro and Mac Pro.

Top-level changes here include the addition of the 10th gen Comet Lake processors that Intel revealed back in April. The six- and eight-core versions of the chips will come as standard configurations, upgradable all the way up to a 10-core i9, which starts to push into the low-end of iMac Pro territory. Per Apple’s numbers, there’s up to a 65% CPU performance increase on-board, particularly noticeable on creative pro apps like Logic and Final Cut Pro.

Graphics, naturally, are getting a boost, as well, at up to 55% faster than previous models, courtesy of the AMD Radeon Pro 5000 series — similar to what’s currently found on the 16-inch version of the MacBook Pro. Meanwhile, 16GB RAM is now standard (up from the base 8GB). That’s configurable all the way up to a hart 128GB of DDR4. SSD storage is finally standard across all iMacs, as well. Here the base is 256GB, configurable up to 8TB. The system also now sports the company’s proprietary T2 security chip, as well as an optional 10GB Ethernet connection.

The display is essentially the same as the previous model, though it now features Apple’s True Tone technology for a more natural color balance based on ambient light in the room. There’s also an option for the nano-texture technology found on Apple’s Pro Display XDR, which promises to reduce glare by better scattering light — a nice upgrade for video editors, especially those now working from home with less than ideal lighting situations. Speaking of remote work, the webcam and mic system have been upgraded. The camera is 1080p, coupled with a similar microphone system as the one found in the 16-inch MacBook, feature two in the system’s “chin” and one in the back.

Contrary to all of the rumors, there’s no redesign here. While it seems entirely plausible — even likely — that a major one is on the way, you’ll have to wait for that. Ditto for the upcoming in-house ARM-based chips. Apple, of course, previously announced that the transition process would take two years to complete — and that there were still Intel Macs in the pipeline. It remains to be seen, however, if the 27-inch iMac will be the last of its kind of that front.

Apple has also noted that it will continue to support Intel Macs for “years to come,” though it’s easy to imagine plenty of folks simply holding off on an upgrade, unless their needs are more dire. And there are probably a number of people in the latter camp, as well, as the reality of working from home doesn’t appear to be ending any time soon (not, for instance, Google’s recent decision to push things back to next July).

The 27-inch still starts at $1,799 and is available starting today. The iMac Pro, meanwhile, now features a 10-core processor (up from 8) as the default configuration, at the same price of $4,999, while the 21.5-inch line (which offer SSDs across the board as per the above) starts at $1,099.

We’ve had huge debates about the future of work — are we going to be working from home, working from the office, or perhaps, working from anywhere?

Well, Facebook has put its wager down, and it’s work from office.

In a flurry of articles in the local press overnight, the New York Times and others confirmed that Facebook has secured the main office lease on the James A. Farley Building, located one block south of Penn Station in western Midtown Manhattan. The company’s lease was for 730,000 square feet, which will be added to the company’s existing 2.2 million square feet that includes 770 Broadway, TechCrunch’s nominal NYC headquarters as well as those of our parent company Verizon Media.

It’s a statement on the future of the Farley Building, which today is the hub of the Postal Service’s operations in New York. The building has long been central to the schemes for renewing Penn Station, with its gorgeous facade abutting Eighth Avenue that many planners believed could be the locus for a new competitor to Grand Central Station after the original Penn Station was torn down decades ago. After decades of debate, a new Amtrak and Long Island Rail Road passenger hall and platform is planned for opening in 2021.

Facebook joins several other tech companies in the neighborhood. Google’s New York City headquarters is just down the street on Eighth Avenue in Chelsea, which was a similarly massive transaction when Google bought the former Port Authority building in one of the largest real estate deals in New York City history back in 2010. Datadog, one of New York City’s best performing IPOs, is just up the street on Eighth Avenue in The New York Times headquarters building. Meanwhile, Amazon has its headquarters just a few blocks east.

While certainly a strong indication that New York City’s tech scene remains vibrant, the move is curious given the tech industry’s broad movement toward remote work over the past few months. Facebook itself has said that it is going to allow remote work well into the future, and also will build more regional hubs in cities like Dallas. From our article in May, “The Facebook CEO estimated that over the course of the next decade, half of the company could be working fully remotely.”

Rumors about Facebook taking the Farley building have persisted since last year, and even Apple was believed to be eyeing the location to expand its … Big Apple presence.

Office space of this size and caliber is hard to find, which is likely why Facebook pulled the trigger now instead of waited for more information related to the long-term effects of COVID-19 on the future of work. Nonetheless, the company seems clear in its mentality: workers are going to have more space to come into work, perhaps with some more flexible working arrangements on the side.

Facebook is making it easier for businesses to leverage its Messenger service on their own websites. The company in November 2017 first launched a new customer chat plugin which allowed customers to talk directly with a business on the business’s own website using the Messenger service. However, that plugin had required the website visitors to be logged into Facebook, limiting adoption. Today, that’s changing, Facebook says.

The prior version of the plugin may have worked for smaller businesses who couldn’t afford a more robust live chat service, but it also limited customers’ ability to interact. Customers who didn’t use Facebook, couldn’t remember their password, or who were visiting the website from a different device than their own, for example, wouldn’t have been able to chat with the business.

Other customers may have simply wanted to submit their queries more anonymously — perhaps worried that the business would continue to bother them later in their Messenger app, even if they weren’t ready for such a direct relationship.

The updated plugin will now allow customers to talk to businesses without being logged in, Facebook says. Instead, a “continue as guest” option will be available. However, on the business’s side, they’ll still be able to use all their same tools to manage their conversations with these online users, whether logged in or not.

Facebook hints that its requirement around being logged in may have limited adoption of the product. Developers who built websites for clients, for instance, claimed the plugin wasn’t always an easy sell, as it required the business to offer some sort of alternative for the non-logged in users.

“As a developer, it’s much easier to convince a business to use a live chat offering that is available to all their customers,” noted Soma Toth, founder of Recart. “Our business customers are seeing sales directly tied to engagement on Messenger, and the Chat Plugin helps them leverage the same investment across both their Facebook page and their website at no additional cost. It also reduces the complexity of having to work with or support a fallback for users who are not logged into Facebook.”

The update will also bring a redesigned look and feel for the plugin, which Facebook claims had resulted in a 45% increase in customer chats with businesses, during its tests.

To some extent, though, that increase could be partly attributed to the surge of customers shopping online due to the coronavirus pandemic, not just the better plugin.

Though Facebook’s plugin has the benefit of being tied to the larger social network, where many businesses today run their own Page to reach customers, it’s still facing a range of chat software competitors, large and small, including solutions from brands like HubSpot, Intercom, Live Chat, Zendesk, Zoho, and dozens of others. These competing solutions will often offer deeper integrations with other services the business may need to use, like CRM, analytics, help desk software, tools for lead gen and sales, and more.

Businesses can now choose to install the plugin themselves, or they can work with partners like WooCommerce, ManyChat, and Haravan to have it installed for them, Facebook says.

 

 

Radish is announcing that it has raised $63.2 million in new funding.

Breaking up book-length stories into smaller chapters that released over days or weeks is an idea that was popularized in the 19th century, and startups have been trying to revive it for at least the past decade. Still, this round represents a major step up in funding, not just for Radish (which only raised around $5 million before this), but also compared to other startups in a relatively nascent market. (Digital fiction startup Wattpad is the notable exception.)

When I first wrote about Radish at the beginning of 2017, the startup was focused on user-generated content. Last year, however, the company launched the Radish Originals program, where Radish is able to produce more content using teams of writers lead by a showrunner, and where the startup owns the resulting intellectual property.

“Instead of becoming YouTube or Wattpad for serial fiction, we want to be more like Netflix and create our own originals,” Kim told me. “I got a lot of inspiration from platforms in Korea, China and Japan, where serial fiction is huge and established on mobile.”

One of the ideas Radish took from the Asian markets is rapidly updating its stories. For example, its most popular title, “Torn Between Alphas” (a romance story with werewolves) has released 10 seasons in less than a year, with each season consisting of more than 50 chapters — in fact, later seasons have more than 100 chapters — that are released multiple times a day.

“On Netflix, you can binge-watch three seasons of a show at once,” Kim said. “On Radish, you can binge-read a thousand episodes.”

While Radish borrowed the writing room model from TV — and hired Emmy-winning TV writers, particularly those with a background in soap opera — Kim said it’s also taken inspiration from gaming. For one thing, it relies on micro-payments to make money, where users buy coins that allow them to unlock later chapters of a story (chapters usually cost 20 or 30 cents on average, and more chapters get moved out from behind the paywall over time). In addition, the company can allow readers to determine the direction of stories by A/B testing different versions of the same chapter.

Kim pointed to the fall of 2019 as Radish’s “inflection point,” where the model really started to work. Now, the company says its most popular story has made more than $4 million and has more than 50 million “reads.” Radish stories are mostly in the genres of romance, paranormal/sci-fi, LGBTQ, young adult, and horror, mystery and thriller, and Kim said the audience is largely female and based in the United States.

By raising a big round led by SoftBank Ventures Asia (the early stage investment arm of troubled SoftBank Group) and Kakao Pages (which publishes webtoons, web novels and more, and is part of Korean internet giant Kakao), Kim said he can take advantage of their expertise in the Asian market to grow Radish’s audience in the U.S. That will mean increasing content production in the hopes of creating more hit titles, and also spending more on performance marketing.

“With its own fast-paced original content production, Radish is best positioned to become a leading player in the global online fiction market,” said SoftBank Ventures Asia CEO JP Lee in a statement. “Radish has proven that its serialized novel platform can change the way people consume online content, and we are excited to support the company’s continued disruption in the mobile fiction space. Leveraging our global SoftBank ecosystem, we hope to support and accelerate Radish’s expansion across different regions worldwide.”

Big news today in the world of enterprise IT startups. Rippling, the startup founded by Parker Conrad to take on the ambitious challenge of building a platform to manage all aspects of employee data, from payroll and benefits through to device management, has closed $145 million in funding — a monster Series B that catapults the company to a valuation of $1.35 billion.

It is a big leap for the company: it was just a little over a year ago that it raised $45 million at a valuation of $270 million.

This latest round is a testament not only to the interest among investors and customers to put big bets on platforms that are making a consolidating play on a market that has otherwise suffered from a lot of fragmentation; but it is also a testament to how investors are putting a big bet on Conrad himself, who was ousted from his previous company, Zenefits (taking on a related, but smaller, challenge in payroll and benefits), over misleading investors and the company itself.

This latest round included Greenoaks Capital, Coatue Management, and Bedrock Capital, as well as existing investors including Kleiner Perkins, Initialized Capital, and Y Combinator. Founders Fund partner Napoleon Ta will join Rippling’s board of directors. Founders Fund had also backed Zenefits when Parker was at the helm, and from what we understand this round was oversubscribed — also a big feat in the current market, working against a lot of factors including a wobbling economy.

“Rippling is not just a superior payroll company, but something much broader: they’ve built the system of record for all employee data, creating an entirely new software category. Rippling’s massive market opportunity is to streamline the employee lifecycle, from software to payroll to benefits, and fundamentally improve the way businesses hire and manage their employees,” said Ta in a statement.

“Once you’re lucky, twice you’re good,” said Mamoon Hamid, Partner, Kleiner Perkins, in a separate statement. “Parker is a true product visionary, and he and his team are solving an enormous pain point for businesses everywhere. We’re thrilled to continue partnering with Rippling as demand for their platform dramatically increases in this era of remote work.”

We’re talking with Conrad in a bit and will update the post with more then.

Security professionals are constantly dealing with an onslaught of information as their various tools trigger alerts, some of which require their attention and some which don’t. Unfortunately, it requires addressing the alert to find that out. GreyNoise wants to help by filtering out benign security alerts, leaving security pros to deal with the ones that matter.

Today, the company announced a $4.8 million seed investment led by CRV with participation from Paladin Capital Group and several individual tech executive investors.

“Usually about 20% of the alerts that you’re looking at [don’t require your attention]. And those alerts are generated by both good guys and bad guys who are opportunistically scanning and crawling and probing and attacking every single device all around the internet,” GreyNoise founder Andrew Morris told TechCrunch.

He adds, “It creates this background noise problem, so we basically collect all of that data from all of those people who are scanning and crawling everybody on the entire internet, analyze it and we filter it out from what our customers see. So what they end up with is about 20%, fewer alerts.”

Surprisingly, the company is not using machine learning to do this (although adding machine learning elements is on the roadmap). Instead, Morris says it involves a lot of automated analysis of sensor data.

“We have a giant network of collector sensors that are sitting in all these different data centers all around the internet and hundreds of data centers around the internet. And we’re just applying a bunch of rules to the traffic that they all see to end up with the output of our core product,” he said.

As the company moves forward with this new funding, he says primarily he wants to get away from this approach and get more data from customers in exchange for discounts on their subscription costs.

“Moving forward, it’s cost prohibitive for us to collect all of the data that we want firsthand. So we’re going to have to start basically building products that are enabling our users to collect data for us. And that’s something that we’re going to be building out using this funding,” Morris said.

In addition, they will be partnering with other key vendors like ISPs and data center owners to help them collect additional data.

Interestingly, this was an entirely COVID transaction with CRV’s Reid Christian never meeting Morris in person, conducting the entire process over Zoom. “A sign of the times, Andrew and I have never met in person and likely won’t for quite some time. We were connected in the midst of quarantine, both of us holed up in our apartments (DC and SF, respectively) where we sat on countless Zoom calls, mostly getting to know each other and discussing the opportunity ahead of GreyNoise,” Christian wrote in a blog post announcing the deal.

The startup has 7 employees to this point. Morris said that he has plans to hire 10 people in the next year with an emphasis on sales, marketing and engineering. As he hires more people, he says it’s imperative to be thinking about diversity and inclusion in his hiring in the early stages of the company.

“The best way to do this is to hire as diverse as humanly possible from the very beginning, because it’s significantly harder to make a company more diverse after the fact than it is to think about inclusion and diversity from the very beginning. And so that’s how we’ve been thinking about everything right now with every hire that we’re doing,” he said. How that will work as he builds out the company is still something he is considering and he plans work with D&I experts to help flesh out a plan.

Morris founded the company in the Washington, D.C. area in 2017, came to market in 2018 with the first version of the product and today has 40 customers.

Today Intercom announced that it has hired a chief financial officer (CFO) as it ramps towards an IPO. The unicorn also promoted its COO to the CEO role earlier this year.

The company’s recent CEO, Karen Peacock, told TechCrunch that her new CFO Dan Griggs was a strong candidate thanks to his experience helping take Rocket Fuel public, and for helping execute a “whole business transformation” at Sitecore, where he worked immediately before coming to Intercom.

Intercom is a software startup that sells customer-chat software that works with support and marketing teams. Different tiers of its service allow for automated “conversational” campaigns, and custom bots. The company has raised a hair over $290 million, according to Crunchbase data.

Griggs told TechCrunch that he was not in the market for a new role, but conversations with Peacock drew him in.

Peacock took over the CEO role after around three years as the company’s COO, during which time it became known that the preceding CEO had made “unwanted advances” on employees. Intercom company also underwent layoffs before Peacock took over the helm. According to reporting, the firm cut around 6% of its staff in May, a time when many tech companies were trimming personnel due to market uncertainties surrounding COVID-19 and its economic disruptions.

Now Intercom has a refreshed c-suite, and is at IPO scale.

According to TechCrunch reporting at the time when Peacock took over as CEO, Intercom had around $150 million in annual recurring revenue (ARR). The company clarified to TechCrunch that the ARR milestone was reached at the end of its last fiscal year, or the conclusion of January of 2020.

Intercom, Griggs said, is near profitability and is growing in the “strong” double digits. We read that as meaning between 50% and 99% growth, implying the company could close its current fiscal year (January 2021) with $225 million to $298.5 million in ARR, with a bias — thanks to the laws of large numbers — towards the smaller figure.

With a CFO with IPO experience on hand, a new CEO, a material revenue base and good growth, when is the IPO? Not soon, sadly. The CFO said his company doesn’t need to raise new capital, and that it has enough liquidity today to invest. That’s financial-speak for “no rush.”

The CEO is on the same page, saying during the same call that Intercom is not in a hurry to go public, and wants to build out some internal infrastructure before executing the transaction. There won’t be an IPO for at least twelve months, she estimated.¹

Intercom hit some market chop in 2020 and had to spend parts of the last year or so cleaning up internal issues. Now, in theory, it has sorted house, and is operating in a market that has greatly rewarded software startups in recent quarters, especially those helping other companies operate digitally.

Let’s see how fast Intercom can grow. We’ll get the full retrospective with its eventual S-1.

1. Alas.

Today AgentSync announced that it has closed a $4.4 million Seed round, co-led by Elad Gil and Caffeinated Capital. Other well-known names from the Silicon Valley scene took part in its funding round, including Affirm’s Max Levchin and the podcaster turned VC Harry Stebbings, among others.

The round caught our eye because AgentSync is working in a space that has seen a notable wave of venture interest in 2020 — insurtech, which we’ve covered somewhat extensively — and because it shared hard revenue numbers, which we love.

So let’s talk about how the company’s co-founders Jenn Knight and Niji Sabharwal wound up building software for the insurance market.

From Zenefits to new beginnings

AgentSync offers what it describes as “compliance as a service,” helping insurance carriers and insurance agencies track insurance broker licensing data. For companies accustomed to doing this work with spreadsheets, AgentSync offers a faster method, built on top of Salesforce’s platform, saving time and lowering the chance of error.

(Tech firms building on top of Salesforce are having a good year, incidentally.)

The idea for the company was born from Sabharwal’s time at Zenefits.

Sabharwal was an early-employee at the infamous startup. To hear the AgentSync co-founder tell the story, Zenefits grew at an inhuman clip, scaling from 100 employees when Sabharwal joined to over 1,700 a year later.

During its period of hyper-growth, reporting later uncovered, Zenefits did not sufficiently appreciate that it operated in a highly-regulated industry. The resulting compliance mess forced co-founder Parker Conrad from the company, with former Yammer boss David Sacks taking the reins to clean house.

At the time of his takeover, TechCrunch reported that Sacks wrote to Zenefits staff that “compliance is like oxygen,” and that without the company would “die.”

Conrad got fined by the SEC, Zenefits cut staff, and had to re-value itself. Sacks eventually left the company. But behind the headlines Sabharwal described work to rebuild Zenefits in a more compliant fashion from the inside-out. Part of those efforts, he said in an interview, was building software that helped track agent compliance, a project that Zenefits later open-sourced and released.

TechCrunch covered the release at the time, writing that Zenefits had built “a licensing compliance app it created in-house to ensure its sales people are properly licensed to sell insurance in a given state available for free to anyone to download from the Salesforce App Exchange.”

The software integrated with National Insurance Producer Registry (NIPR) data, which the co-founder describes as a source of truth in the insurance market. The software allowed users to confirm that individual agents were compliant. The effort bought Zenefits some kudos with regulators, and, according to Sabharwal, other companies looking to use the software.

From the meeting point of internal software project and external demand, AgentSync was formed, with Sabharwal leaving Zenefits to start his company with his partner, Knight. Knight, who has done stints at Dropbox (Head of Business Technology) and Stripe (Head of Internal Systems), worked part-time at AgentSync before joining the startup full-time this year.

Zenefits signed the IP from the earlier project over to Sabharwal before his team wrote any code for AgenySync, allowing the company to get a clean start.

The insurance market is enormous, lucrative, and old-fashioned. That makes it a prime space to attack. The software also helps groups onboard agents, execute what the startup calls “automatically-generated compliance analysis” to help spot gaps and other data errors.

And AgentSync is seeing traction, scaling to $1.9 million annual recurring revenue (ARR) at the time of publication. The company charges per active agent a customer has, with some price tiering based on scale.

Today the startup has 17 people, and is targeting 22 by the end of the year. (It’s investing in its go-to-market functionality post-fundraising.)

On the personnel side, Knight, the company’s CTO, has built a technical team that is majority women, an unfortunately a rarity in the industry. She also said that she’s “acutely aware of the equity and pay gaps that exist for women and underrepresented groups across the industry.”

I haven’t had the chance to talk to too many denizens from the Zenefits alumni, but what’s fun about AgentSync is that it was born effectively out of an effort to fix what went wrong at the unicorn. And, it’s found a market for that fix. Let’s see how far it can get on $4.4 million.

Amid a crowded market of mobile banking services, which will soon also include Google, U.S. challenger bank Current is launching a new program that will offer points-based rewards to its checking account customers. The program will allow Current members to earn up to 15x points on everyday debit card purchases at over U.S. 14,000 merchants, including national retailers like Subway, Rite Aid, True Value, Cold Stone Creamery, and others.

The points program is an alternative to other credit cards’ “cashback” offerings, which reward users immediately with cash they can keep or apply to their next bill. Instead, Current’s points will accumulate under a user’s account to certain thresholds, then can be redeemed for cash at a rate of 100 points per dollar. They can also be used for subscriptions.

At the moment, the points can be applied only to Current’s own membership subscription — the service offers a Premium tier for $5 per month — but further down the road, the company envisions using points to pay for a wide variety of subscription services.

At launch, Current says around 50% of its user base lives within 2 miles of an offer, but it’s working to get that number to 100%. In addition, Current’s users tend to be out and about in their city, even amid the pandemic, as the majority (around 80%) are classified as “essential workers.” This includes those who work in logistics-related fields, like Walmart, Amazon, Instacart, Doordash, Uber, and Lyft, as well as nurses, military, and government workers.

Because of their jobs, they’re more likely to be out getting gas or eating at restaurants, where they could easily gain points. Current estimates its members will save $165 per year in cash back just from their gas purchases alone, for example.

The company is the first neobank to roll out a points-based rewards program in the U.S., it says. Though plenty of U.S. credit cards offer points or cashback programs, the large market of debit card users is typically ignored. (There are a few rewards-based debit cards, but they’re few and far between).

“People who use debit typically live paycheck to paycheck and have far less money,” explains Current founder and CEO, Stuart Sopp. He says Current primarily wants to improve these users’ financial outcomes, as that’s the company’s core mission.

However, the program will also allow Current to stand out among a growing number of alternative banking apps that are starting to all look the same thanks to a baseline of consumer-friendly features like no-fees banking, free cash withdrawals, and modern mobile budgeting tools, among other things.

“If it means competitively — compared to Varo, Chime, Square and Venmo — that users in an increasingly crowded market see there’s more value with us, then that’s great,” notes Sopp. “We’re very proud to stick our head out and say, we’re the first and only fintech challenger bank to offer points,” he says.

The points program, over time, will also help to generate additional revenue for Current as it establishes a relationship between the bank and merchants — something that could prove valuable as Current expands its product line-up.

At the moment, Current is leveraging several undisclosed third-parties to help power its points program, combined with internal efforts — the latter focused on onboarding the larger brands. Over time, as the points program grows, Current hopes its merchant partners will pay for the privilege of having their offers surfaced to those users who are most likely to redeem them.

Sopp says this wouldn’t involve sharing users’ personal data, but rather would focus on targeting offers more appropriately to end users. For instance, an offer for a restaurant may appear around lunch time. Offers could also be more precisely geolocated, on an opt in basis, so you’ll get an alert to an offer as you walk in a store.

The points program is rolling out now to Current’s 1.3 million members, both Basic (free) and Premium (paid). Combined, Current users have deposited over $1 billion to date in the mobile bank.